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Friday, 7 February 2014

Ethiopian Airlines chief dismisses Stelios’s "Fastjet" African dream

Africa is not ready for airlines such as Fastjet, the brainchild of EasyJet founder Stelios Haji-Ioannou, says the head of the continent’s leading carrier. Ethiopian Airlines chief executive Tewolde Gebremariam told the Aviation Club in London yesterday: “We have a different view of the low-cost model in Africa because cross-border traffic in Africa is fragmented.”

Gebremariam said: “Low-cost carriers are based on utilising aircraft 10 times a day, then unit costs come down. It is very difficult to do that in Africa. “Point to point will be challenging on the continent [because] 60% of market segments in Africa have less than 50 passengers per day.” Fastjet began operating as a low-cost carrier in November 2012, based in Tanzania and also serving South Africa and Zambia.

Co-founder Haji-Ioannou has plans to turn Fastjet into a pan-African carrier But Gebremariam said: “There are other constraints. One is traffic rights between countries. “The low-cost model could be perfect within a country’s borders, within Nigeria or South Africa for example. But the issue of cross-border traffic rights is a big bottleneck.”

He added: “The low-cost model should transform costs. But in Africa low-cost and full-service carriers pay the same not just for fuel but for [using] the airport. It is very difficult.” Gebremariam was also critical of European governments, especially the UK’s. He said: “We see aviation’s centre of gravity moving from Europe to the Gulf and European governments and politicians are helping the [Gulf carriers] by making it very difficult for airlines to operate in Europe. “Tax is one factor. Airport congestion is another. Ethiopian Airlines wants to fly to Heathrow twice a day but we can’t even go daily. We operate six flights a week. “A third runway has been discussed for years. Dubai just got on and built six runways.”